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IHS: Telematics Revenue to Reach $4.2 Billion by 2021

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New forecasts from IHS Automotive are predicting global revenue from automotive telematics systems to reach $4.2 billion by the end of 2021. This is a compound annual growth rate (CAGR) of more than 19%.Global_Automotive_Telematics_Revenue_2014-2021

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Data from the IHS Automotive Telematics Forecasts represents production of telematics systems, including embedded, consumer electronics and hybrid telematics, IHS said.

“The telematics supply chain will see amazing growth and innovation through the end of the decade, as more vehicles debut new connected solutions that make use of embedded modules, while at the same time enabling consumers to fully leverage their mobile devices,” said Anna Buettner, manager for infotainment at IHS Automotive.

“There are opportunities in vehicle segments that traditionally didn’t offer connectivity, but due to market demand and the imminent roll-out of eCall in Europe, the avenues are opening up quickly,” Buettner said. “Autonomous driving applications will further drive the demand for non-stop, reliable connectivity.”

Even though telematics has existed in the automotive industry for almost 20 years, growth is still expected for the next decade, IHS said.

Global production volumes for all telematics systems are estimated to grow by more than 112%, surpassing 55 million units in 2021, IHS Automotive said.

According to the data, consumer electronics-based (CE) solutions will make up nearly 30% of the market, with embedded systems making up about 15% of the market in 2021. Additionally, hybrid telematics will boast the strongest revenue CAGR at more than 12% from 2015 – to 55% of the overall market, IHS reports.

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Currently, CE telematics leads the global automotive telematics market since it is a relatively low-cost solution. IHS predicts this trend to continue with future cars featuring multiple connections for a variety of applications and services. This will lead to hybrid telematics dominating the market after 2018, IHS said.

The European eCall mandate, effective March 2018, will require an embedded connection in vehicles for automatic crash notification (ACN) and SOS calling, which forces all OEMs to offer either embedded or hybrid telematics, IHS shared. This mandate will lead to growth in the telematics market.

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